There must be something in the water this week, having seen three of the UK’s most senior executives announce their departure yesterday, Imperial Brands joined in this morning by announcing the departure of their own CEO Alison Cooper, after eight years in the role.
The timing of the move is curious, given that the company, as well as the sector, is facing some serious headwinds as we move into the end of the year and look to 2020. Last week the company saw its share price fall sharply to nine-year lows after the company announced that it was cutting its revenue guidance on the back of concerns that the health problems now being expressed about vaping could result in a sharp slowdown in sales.
In August we heard early reports about a series of deaths from the 18-35 age group which may have been linked to vaping. These reports have now turned into a stream and ultimately nixed the recent attempts by Altria and Philip Morris to come back together after an 11-year separation.
The tobacco industry is now facing the prospect of an existential crisis, with a slowdown on normal cigarette sales already cutting into profits, e-cigarettes were supposed to be the next key growth area. This strategy now appears to be under threat after the US threatened to ban e-cigarettes from the market until the US Food and Drug Administration has done a more significant study. There is also the not insignificant threat that the sector could face which could send the sectors earning potential up in smoke. Given these problems looking for a new CEO would appear to be the least of its problems.
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